Asia Stocks Erase Loss as Hong Kong Rally Offsets Japan Declines

  • Investors mull Japan stimulus after better-than-expected GDP
  • New Zealand equities slide, retreating from all-time high

Asian stocks erased losses as a rally in Hong Kong equities and gains in Nintendo Co. offset declines in Japanese financial shares.

The MSCI Asia Pacific Index rose less than 0.1 percent to 142.19 as of 4:17 p.m. in Hong Kong, after falling as much as 0.5 percent earlier. The gauge closed on Wednesday at its highest level since July 2015, as traders pared bets on a U.S. rate hike in September amid a string of unexpected weak data for August.

“The market is losing momentum,” Bernard Aw, a strategist at IG Asia Pte in Singapore, said by phone. “Investors are probably looking for fresh catalysts that may come in the form of additional stimulus from the European Central Bank or Bank of Japan.”

Japan’s Topix index slipped 0.3 percent as the yen traded at 101.54 against the dollar. The nation’s economy grew 0.7 percent in the second quarter, revised figures by the Cabinet Office showed on Thursday. That compares to a previous outlook for a 0.2 percent increase.

Monetary Policies

The upward growth revision is good news for Prime Minister Shinzo Abe and BOJ Governor Haruhiko Kuroda as they seek to revive the economy and spur inflation. The report comes before this month’s closely watched Bank of Japan meeting, at which the board will conduct a comprehensive review of monetary policy and decide whether it should expand easing.

Japanese banks and insurers fell amid speculation on whether the BOJ will cut its key policy rate further as part of stimulus efforts. BOJ Deputy Governor Hiroshi Nakaso said ruling out a further cut to negative rates wouldn’t be the right approach.

The European Central Bank will review policy on Thursday and is forecast to maintain unprecedented stimulus as President Mario Draghi lays out fresh growth and inflation projections for the euro area.

New Zealand’s S&P/NZX 50 Index slipped 0.5 percent, retreating from a record. Australia’s S&P/ASX 200 Index declined 0.7 percent. Thailand’s SET Index plunged 1.7 percent to a two-month low. South Korea’s Kospi index added 0.1 percent.

Hong Kong’s Hang Seng Index climbed 0.8 percent to the highest close since August 2015. Chinese shares in Hong Kong climbed for a sixth day, narrowing their price gap with mainland counterparts to the smallest since 2014, as cheaper valuations in the city lured investors. The Shanghai Composite Index added 0.1 percent.

China’s exports slipped 2.8 percent in U.S. dollar terms in August from a year earlier, while imports rose for the first time since 2014, the customs office said on Thursday. The statistics bureau is due to release August inflation figures on Friday and data on industrial output, fixed-asset investments and retail sales next week.

Philippine Swings

The Philippine Stock Exchange Index added 0.6 percent, rising for the first time in four days. The gauge lost 2.4 percent in the first three days of the week, with foreign funds pulling the most money from the equities in almost a year on Wednesday, amid speculation the outbursts of President Rodrigo Duterte will have consequences that go beyond politics.

“People are just taking profit since the stock market has done so well,” Lai Yeu Huan, a Singapore-based senior fund manager at Nikko Asset Management Ltd., said by phone. “While it’s convenient to pin this on Duterte’s remarks, I don’t think that’s why people are selling.”

BHP, Nintendo

Nintendo Co. surged 13 percent in Tokyo after saying it will release Super Mario Run in Apple Inc.’s App Store in December, the first time the popular franchise is appearing on a smartphone. BHP Billiton Ltd., the world’s biggest mining company, fell 1.2 percent in Sydney after China cut imports for a fifth month to the lowest level in a year amid slowing demand and rising production. Longfor Properties Co. dropped 5.6 percent in Hong Kong after the Chinese developer’s second-largest shareholder sought to sell shares at a discount.

Futures on the S&P 500 Index rose 0.1 percent. The underlying U.S. equity benchmark index closed flat on Wednesday after rising to within three points of an all-time high as the dollar snapped a two-day slide. The Nasdaq Composite Index rose 0.2 percent to a fresh record.

The U.S. economy grew at a modest pace in July and August as a strong labor market failed to put much upward pressure on wages and prices, the Federal Reserve’s latest Beige Book showed Wednesday. The U.S. Citigroup Economic Surprise Index, which measures how data comes in relative to expectations, fell below zero for the first time since July, a sign that some figures have been worse than expected.

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